fund
Threadneedle UK Equity Income Z GBP
Targets both capital growth and income from FTSE 100 and FTSE 250 stocks.
- 143.51p Price (Inc)
- 190.22p Price (Acc)
- 0.00% Initial charge
- 0.75% Annual management charge
- 0.83% Ongoing charges
- 4.10% Yield
Prices as at 05 December 2019, fund data last updated 08 October 2015
This fund aims to maximise capital growth whilst also providing enough income to meet the yield requirement of the IA UK Equity Income sector (a yield 10% above that of the UK stockmarket). Manager Richard Colwell invests predominantly in large and mid-cap UK equities, forming his portfolios through a combination of macro-economic themes and fundamental stock analysis. He tends to take a fairly balanced approach, unlike certain peer group funds which can be more aggressively or defensively positioned.
Fund summary
| Sector | UK Equity Income |
| Structure | OEIC |
| Launched | October, 2012 |
| Size | £4,187m |
| Yield | 4.10% |
| Charging basis | Capital |
| Dividends paid | 7 Feb, 7 May, 7 Aug, 7 Nov |
Charges
| Standard initial charge | 0.00% |
| Initial charge via Bestinvest | 0.00% |
| Additional bid/offer spread | 0.00% |
| Annual management charge | 0.75% |
| Ongoing charges figure | 0.83% |
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Investment process
This is an unconstrained UK multi-cap portfolio, though in practice almost all investments are in FTSE 100 and FTSE 250 stocks - exposure to small caps is limited. Although the fund is guided by the house thematic and macro-economic views, the manager has a strong preference for fundamental stockpicking. This fund is managed in a flexible manner and benefits from an experienced UK desk, where the team double up as fund managers/analysts and carry out over 800 company meetings a year. The manager has a preference for companies with ‘solid’ management and generally steers clear of weak balance sheets. He also places a premium on companies which are able to generate a high level of cashflow. Yield is targeted at the portfolio level, so non dividend-paying recovery situations sometimes feature. The portfolio tends to have a fairly balanced structure – the manager sometimes tilts it in favour of defensive or cyclical stocks based on the macro view, but avoids aggressive skews.
This is a core fund for equity income investors. Colwell takes a “plain vanilla” approach, investing purely in UK stocks, shunning derivatives and avoiding the strong style biases that we sometimes see in the UK Equity Income sector. He enjoyed a successful period on the fund as co-manager alongside Leigh Harrison from 2010 before stepping up to lead manager in 2015. With Harrison retiring in 2016, the UK team maintains its strength in depth with typically strong performance across the board. Colwell also has a strong track record in his own right.
Manager research
Average monthly relative returns
- 14/15 0.48%
- 15/16 0.01%
- 16/17 -0.05%
- 17/18 -0.01%
- 18/19 -0.08%
Bestinvest MRI
- 3 years -0.05%
- 5 years 0.07%
- Career 0.12%
- 3 years 54.00%
- 5 years 80.00%
- Career 99.20%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.
Richard Colwell
Colwell joined Threadneedle in January 2010, having previously been at Aviva from January 2007. Previously, he worked as a fund manager at Credit Suisse Asset Management from 2002 and was responsible for a range of institutional pension funds, the Sun Life of Canada closed funds, as well as retail portfolios. He started his investment career at Schroders as a pharmaceuticals analyst, then becoming a portfolio manager for five years. He joined the industry from the Bank of England. He holds a BA (Hons) in Banking & Finance and is an associate member of both the IIMR and CIB.
Track record
Richard Colwell has 14.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.12%. During the worst period of relative performance (from February 2016 - December 2017) there was a decline of 8% relative to the index. The worst absolute loss has been 39%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.
Periods of worst performance
| Absolute | -39.00% (October 2007 - February 2009) |
| Relative | -8.00% (February 2016 - December 2017) |
About the MRI
Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.
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Top 10 holdings
Data accurate as at 31 August 2019
| 9.5% | Astrazeneca Plc |
| 6.4% | Glaxosmithkline |
| 4.6% | Rentokil Initial |
| 4.2% | Electrocomponents |
| 4.1% | Imperial Brands Plc |
| 4.1% | Unilever |
| 3.6% | Rsa Insurance Group Plc |
| 3.5% | 3i Group Plc |
| 3.4% | Phoenix Group Hldgs |
| 3.4% | Royal Dutch Shell |
| Source: Trustnet |
Sector breakdown
| Industrials | 27.00% |
| Consumer Services | 21.00% |
| Health Care | 16.00% |
| Financials | 14.00% |
| Consumer Goods | 10.00% |
| Oil & Gas | 3.00% |
| Utilities | 3.00% |
| Basic Materials | 2.00% |
| Telecommunications | 2.00% |
| Cash & Cash Equivalents | 1.00% |
Portfolio
45-60 stocks with low turnover.
Constraints
Typical sector weights +/-11% versus benchmark, stock weights +/-5%.